IWF vs. MTUM: What’s The Difference?

The iShares Russell 1000 Growth ETF (IWF) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and MTUM is a iShares Large Growth fund. So, what’s the difference between IWF and MTUM? And which fund is better?

The expense ratio of IWF is 0.04 percentage points higher than MTUM’s (0.19% vs. 0.15%). IWF also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWF has provided higher returns than MTUM over the past ten years.

In this article, we’ll compare IWF vs. MTUM. We’ll look at performance and risk metrics, as well as at their annual returns and holdings. Moreover, I’ll also discuss IWF’s and MTUM’s industry exposure, portfolio growth, and fund composition and examine how these affect their overall returns.

Summary

IWF MTUM
Name iShares Russell 1000 Growth ETF iShares MSCI USA Momentum Factor ETF
Category Large Growth Large Growth
Issuer iShares iShares
AUM 72.16B 14.53B
Avg. Return 17.72% 17.37%
Div. Yield 0.52% 0.44%
Expense Ratio 0.19% 0.15%

The iShares Russell 1000 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% with an expense ratio of 0.19%.

The iShares MSCI USA Momentum Factor ETF (MTUM) is a Large Growth fund that is issued by iShares. It currently has 14.53B total assets under management and has yielded an average annual return of 17.37% over the past 10 years. The fund has a dividend yield of 0.44% with an expense ratio of 0.15%.

IWF’s dividend yield is 0.08% higher than that of MTUM (0.52% vs. 0.44%). Also, IWF yielded on average 0.36% more per year over the past decade (17.72% vs. 17.37%). The expense ratio of IWF is 0.04 percentage points higher than MTUM’s (0.19% vs. 0.15%).

Fund Composition

Industry Exposure

IWF vs. MTUM - Industry Exposure

IWF MTUM
Technology 39.29% 15.24%
Industrials 6.19% 12.47%
Energy 0.28% 1.77%
Communication Services 12.82% 13.18%
Utilities 0.03% 0.19%
Healthcare 9.23% 6.41%
Consumer Defensive 4.31% 2.88%
Real Estate 1.85% 0.43%
Financial Services 7.36% 34.32%
Consumer Cyclical 17.62% 9.96%
Basic Materials 1.01% 3.15%

The iShares Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.

IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.

The iShares MSCI USA Momentum Factor ETF (MTUM) has the most exposure to the Financial Services sector at 34.32%. This is followed by Technology and Communication Services at 15.24% and 13.18% respectively. Real Estate (0.43%), Energy (1.77%), and Consumer Defensive (2.88%) only make up 5.08% of the fund’s total assets.

MTUM’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Consumer Cyclical, Industrials, and Communication Services stocks at 3.15%, 6.41%, 9.96%, 12.47%, and 13.18%.

IWF is 24.05% more exposed to the Technology sector than MTUM (39.29% vs 15.24%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 7.66% higher and 0.36% lower respectively (17.62% vs. 9.96% and 12.82% vs. 13.18%). In total, Energy, Basic Materials, and Real Estate also make up 2.21% less of the fund’s holdings compared to MTUM (3.14% vs. 5.35%).

Holdings

IWF - Holdings

IWF Holdings Weight
Apple Inc 10.51%
Microsoft Corp 9.85%
Amazon.com Inc 6.63%
Facebook Inc Class A 3.91%
Alphabet Inc Class A 3.2%
Alphabet Inc Class C 3.03%
Tesla Inc 2.45%
NVIDIA Corp 2.14%
Visa Inc Class A 1.91%
The Home Depot Inc 1.62%

IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.

Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.

MTUM - Holdings

MTUM Holdings Weight
Tesla Inc 5.63%
The Walt Disney Co 4.39%
JPMorgan Chase & Co 4.35%
Berkshire Hathaway Inc Class B 4.34%
Bank of America Corp 3.81%
PayPal Holdings Inc 3.76%
Wells Fargo & Co 3.05%
Applied Materials Inc 3.05%
Moderna Inc 2.89%
Alphabet Inc Class C 2.84%

MTUM’s Top Holdings are Tesla Inc, The Walt Disney Co, JPMorgan Chase & Co, Berkshire Hathaway Inc Class B, and Bank of America Corp at 5.63%, 4.39%, 4.35%, 4.34%, and 3.81%.

PayPal Holdings Inc (3.76%), Wells Fargo & Co (3.05%), and Applied Materials Inc (3.05%) have a slightly smaller but still significant weight. Moderna Inc and Alphabet Inc Class C are also represented in the MTUM’s holdings at 2.89% and 2.84%.

Risk Analysis

IWF MTUM
Mean Return 1.48 0
R-squared 92.93 0
Std. Deviation 14.42 0
Alpha 2.16 0
Beta 1.03 0
Sharpe Ratio 1.19 0
Treynor Ratio 17.1 0

The iShares Russell 1000 Growth ETF (IWF) has a Standard Deviation of 14.42 with a Beta of 1.03 and a R-squared of 92.93. Its Alpha is 2.16 while IWF’s Treynor Ratio is 17.1. Furthermore, the fund has a Mean Return of 1.48 and a Sharpe Ratio of 1.19.

The iShares MSCI USA Momentum Factor ETF (MTUM) has a Standard Deviation of 0 with a Beta of 0 and a R-squared of 0. Its Treynor Ratio is 0 while MTUM’s Alpha is 0. Furthermore, the fund has a Mean Return of 0 and a Sharpe Ratio of 0.

IWF’s Mean Return is 1.48 points higher than that of MTUM and its R-squared is 92.93 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than MTUM. The Alpha and Beta of IWF are 2.16 points higher and 1.03 points higher than MTUM’s Alpha and Beta.

Performance

Annual Returns

IWF vs. MTUM - Annual Returns

Year IWF MTUM
2020 38.21% 29.69%
2019 36.08% 27.57%
2018 -1.68% -1.77%
2017 29.96% 37.6%
2016 6.92% 4.89%
2015 5.48% 9.12%
2014 12.84% 14.48%
2013 33.19% 0.0%
2012 15.03% 0.0%
2011 2.47% 0.0%
2010 16.47% 0.0%

IWF had its best year in 2020 with an annual return of 38.21%. IWF’s worst year over the past decade yielded -1.68% and occurred in 2018. In most years the iShares Russell 1000 Growth ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.84%, 15.03%, and 16.47% respectively.

The year 2017 was the strongest year for MTUM, returning 37.6% on an annual basis. The poorest year for MTUM in the last ten years was 2018, with a yield of -1.77%. Most years the iShares MSCI USA Momentum Factor ETF has given investors modest returns, such as in 2010, 2016, and 2015, when gains were 0.0%, 4.89%, and 9.12% respectively.

Portfolio Growth

IWF vs. MTUM - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWF $10,000 $30,582 17.72%
MTUM $10,000 $29,301 17.37%

A $10,000 investment in IWF would have resulted in a final balance of $30,582. This is a profit of $20,582 over 7 years and amounts to a compound annual growth rate (CAGR) of 17.72%.

With a $10,000 investment in MTUM, the end total would have been $29,301. This equates to a $19,301 profit over 7 years and a compound annual growth rate (CAGR) of 17.37%.

IWF’s CAGR is 0.36 percentage points higher than that of MTUM and as a result, would have yielded $1,281 more on a $10,000 investment. Thus, IWF outperformed MTUM by 0.36% annually.


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